In recent years, the
focus from Sabre has tended toward air, but now its seems
hospitality will get more attention.
During a recent
briefing, Kurt Ekert, the company’s newly appointed president, talked about the
opportunity hospitality presents and how Sabre wants to take advantage of that,
especially in corporate travel.
with Google will play a big role in how its hospitality technology develops, according to Frank Trampert, senior vice president of Sabre Hospitality solutions.
In a discussion with
PhocusWire, Trampert discusses the current hospitality technology landscape, the need
for incremental revenue streams and Sabre’s marketplace development. The conversation has been edited for brevity.
Sabre spoke about an intelligent retailing platform with attribute selling for hospitality in 2019, where are you with that?
The technology transformation we have embarked upon is driven by this need from customers to have personalized offers and they are being spoiled by the retail industry. The service from Netflix, Amazon and Starbucks is something consumers expect in the hospitality industry now. They expect similar experiences - to be recognized at reception, have the beverage they like in their room - which is difficult to execute as the industry is dispersed and fragmented and applications are independently built, not on one single platform, and require deeper integration.
We settled on a platform built to enable things like that level of personalization. You can think of it like a Salesforce, which allows you to configure to an infinite amount of abilities and then you have an open API that allows you to do customization. We don't customize for our customers, we built a platform with tremendous capabilities [and] then our customers can use that platform.
The central reservation system (CRS) always requires you to have a room being booked before you can book something else. Intelligent retailing removes the dependency to book a room first, you can technically book anything so we have been re-architecting our software into an inventory platform - think of it like a SKU (stock keeping unit) in the retail space - to enable retail for hoteliers. In that context the hotelier is limited only by their imagination in how they want to bundle things, and it will all be available in any point in time before the sale, before arrival, during stay or even after the stay.
Attributes have been around for a really long time, but the attribute-based enablement we are doing has additional dimensions. For example, it's really hard to book something for an hour or two, but wouldn't it be nice if you could book something between two and four in the afternoon such as the cabana at the pool and you pay a little bit more. Today all that is difficult, but a retailing environment, with a platform that allows you to bundle it, will allow a hotelier to have these incremental revenue streams.
It is driven by customers with this tremendous expectation. Hotels have been laggards when it comes to innovation and the pandemic helped to accelerate that innovation. They have less staff, they require more automation and a higher level of innovation to drive more revenues and that's where we come in.
Where are we as an industry with attribute selling?
This product is live and being tested with clients. Langham is still part of that and Outrigger in Waikiki, which has a lot of ancillary products to sell, is also a testbed. We’re using these clients to prove the use case and the functionality is working as intended. In June, we’re rolling out 23 features as a first initial investment into our Retail Studio and our intelligent retailing program.
We will have the first pilot customers coming on board in October and will go into general release at the beginning of next year. The Retail Studio will be a uniquely differentiated product that is completely built in the cloud, enabling hoteliers to really monetize their services on premise and anything else they would like to sell.
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We like to think in threes, so this environment is enabled through retailing, distribution and fulfilment. Sabre is a master in connectivity and distribution, we connect channels for our hoteliers to distribute their inventory, and when it comes down to the distribution side of the equation we’re then connecting them to third parties and integrating them through other avenues such as channel connectivity or GDS or from a direct point of view, that’s the kind of environment we are enabling.
The marketplace idea, the Sabre strategy and marketplace 2025 is around creating this environment for others to connect so the platform will, through these open APIs, enable other parties to leverage the infrastructure to distribute and hoteliers can take advantage of that.
It's like an Apple store where Apple defines the standards and specifications and third parties code to those specifications so that everyone can have access. The first idea is to enable the disconnect of needing to book a hotel room to the book everything else architecturally and then enabling it into this marketplace platform. Feature and functionalities will be continuously evolving to includes spaces, meetings room, spa, airport hotels to sell day rooms, etc.
What’s your sense of the appetite of hotel industry to invest in something like this?
They don't have to invest anything, because we enable the functionality, and they pay a transaction fee or fee per room per month. The revenue models are well established in this industry so there's no investment per se.
This is why our platform investment is so crucial. We have put specific emphasis with Google on cloud transformation, to create a secure place to operate in that’s scalable. Initially, we intended to go agnostic with all cloud providers, but we thought to go with Google because it is so involved in travel.
Think of intelligent retailing like an SKU in the retail space, in that context the hotelier is limited only by their imagination.
Frank Trampert - Sabre
We have also embarked with Google on a journey to improve our data practice. It’s around performance reporting and performance insight. The idea is to improve the intelligent data around that reporting so that when you look at the reporting it becomes actionable. Google artificial intelligence and machine learning is industry-leading in that regard, and we're using the Looker platform to enable that.
We have been talking about personalization for five years or more. How far are we along in true personalization? Do we just accept that travel is not frequent enough and we'll never get there?
The total addressable market is $5 trillion in untapped e-commerce potential in 2022, that’s Shopify data. When hoteliers hear that they get very nervous and very interested. If you look at global tourism, that’s predicted to be worth $8.6 trillion this year, 6% below 2019 levels. The opportunities are tremendous, but hoteliers haven’t had the ability to tap into it. So there is no barrier to entry, they are all asking us when it's going to be available.
Is a mindset change required?
I don’t think it's a mindset issue, the mindset is there. Hoteliers are looking for other revenue streams out of necessity and the circumstances imposed by the pandemic but it has accelerated that they should be thinking about themselves differently. Traditionally, they have been accommodation providers but now have the opportunity to broaden their business and that’s the differentiating aspect.
If you ask me, they're ready. What they need to do is get e-commerce skills around how to package, how to market, how to bundle.
What are hoteliers asking of their technology providers post pandemic?
To help them make more money and create more revenue streams. Help them improve their operations with less staff and make it easy for them to do. In this technology landscape, the complexity resides at the back end and simplification comes with the intuitiveness, so we spend a lot time making user interfaces more intuitive. Hoteliers don't have many people or as many as before and want to spend their time with customers, so they are asking us improve the distribution of their inventory.
What would you say are their greatest challenges now when they look at their technology?
Their greatest challenge is just to start making the move and investing. We have seen a significant move in our transactions business in Aprils and the biggest thing is for hoteliers to be confident that the market will recover and that it's time for them to reinvest. We feel we are exceptionally placed to help them regain that confidence and be able to drive incremental revenues.
Sabre was going to do a combined Property Management System (PMS) and CRS, will you ever go back to that strategy?
The good news is that our tech is continuously evolving and in the past two-and-a-half years you have had what I would call a Kodak moment, in particular in on-premise fulfillment, in which hoteliers reach consumers through other third-party applications. All of this happens outside the PMS environment so the landscape is changing. We do have a PMS, which is designed for the U.S., but I do believe there will be some interesting developments where we have the opportunity to do things better and faster.
Kurt Ekert, president of Sabre, talked recently about the opportunity hospitality presents and that, in the past, air has been the core focus. But he says now is the time to look at the hospitality opportunity, particularly in the corporate world - but will business travel rebound?
One camp says it won't rebound, others say it will. In my own experience I combine business and leisure all the time. People are not born to be isolated, they want to mingle and when they have personal interactions, business happens, so I expect it to rebound. The opportunity is whether we can accelerate it by providing a better service to corporate travelers around personalization, and the technology we are building will enable that.
Do you see a disconnect in loyalty today and the generations coming through?
In the old days your ability to understand behavior and patterns was driven by mining PMS data, but in the future that is changing because we’re utilizing different signals. The data is being centrally-captured and the opportunity, through machine learning to refine that data set and service it up in the CRM environment is elevated by a margin. We didn’t have these capabilities in the past, we were unable to find manually the connect points between the search and/or the consumption on premise and through ML and AI we have accelerated the ability to find those patterns and that opens up a whole other dimension.
Do you sense greater collaboration between industry players than there has been in the past?
I kind of like competition, because it keeps you on your toes and helps you understand in various marketplaces how things will evolve. You learn faster and can adopt faster. I believe developing a marketplace requires you to integrate and requires you to build interconnectivity. We have those but we need more, we need more interconnectivity in marketplaces where we don’t have access, such as logistics. We hired a head of partnerships last year, and we’re investing resources to understand what it takes to build these relationships so we can broaden our marketplace out to these other segments.
The question is will people really go into a hotel website to buy a ticket? Well, if I can, I will. The marketplace opportunity is 100% real, but that’s also the most difficult part to do so we’re building these integrations.
Project forward a few years, if I’m a consumer booking a hotel, what will I be able to do?
Your ability to book and find a product will be easier, the process will be frictionless. We talk a lot about connected travel, and you will see a vastly improved booking experience with a vastly improved ability to find what you want. Today, to go on a family vacation it’s really difficult to find what you want, I believe that will become easier and we’re at the core of the marketplace - we have airline, agencies, the hospitality side, rail and car - the whole marketplace and that will equate to more bookings.
Does the current pace of digitization continue?
The pandemic helped hotels to think about being proactive. They have started to recognize they need to be more nimble, faster in ramping up staff, provide opportunities faster and improve operations. They are so burdened with operational difficulties that they are looking desperately for solutions to clean rooms faster by having information faster. They’re asking how they can improve the customer experience if they had the information more quickly and what would the fulfillment opportunity be. Those kinds of things will make a huge difference.